Things to Avoid While Purchasing a New Home

What's better than getting a bunch of new furniture to adorn your future home? Not much. But making large purchases before closing could be trouble. It's wise to remember that until you get the keys, your lender is watching you very closely. Below you'll find a list of things to stay away from during this crucial time of your home purchase.

Don't buy luxury items. It may be tempting to buy that new sofa for the soon-to-be-yours den, but it's advisable to stay away from making large buys like furniture, appliances, electronic equipment, or cars until your home loan closes. Financing your Plasma TVs with a store card or a bank credit card could jeopardize your credit worthiness during the time it means the most. It's even a bad idea to make those big purchases with cash. Lenders are examining your cash on hand when considering your loan.

Don't get a new career. Consistency in your job history is a positive thing to lenders. Changing jobs may not jeopardize your ability to qualify for a loan - particularly if you are getting a better salary. However, finding a new job in the middle of your loan process may influence your approval.

Don't switch banks or move finances around in your bank accounts. Bank statements from recent months for accounts in your name (savings, checking, money market, and other accounts) will be reviewed as the lender makes decisions regarding your loan application. To detect fraud, lenders look for a clear and consistent picture of how you earn your money and where any additional funds come from. Switching banks or moving funds elsewhere - no matter the reason - may hinder the review of your funds.

Don't deliver earnest money directly to the seller in a FSBO (for sale by owner) purchase. Your good faith deposit does not belong to the seller: it is actually yours until the sale closes. Your seller might not know that any good faith funds is to go toward your expenses upon closing. An attorney or other type of neutral party can hang onto your earnest money, or you may put it temporarily into a trust account until you close. Your purchase agreement should specify where the funds go if the home purchase fails.

Amity Mortgage LLC can answer questions about these "Don'ts" and many others. Give us a call: 2037296681.